• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME-18-0886-BC
      • Effective Date
      • 27 November 2019
    • FILE NO.:

      18-0886-BC

      MEMBER:

      Martin Venit

      CME RULE VIOLATIONS:

      Rule 521. Requirements for Open Outcry Trades (in part)

      In open outcry trading, bidding and offering practices must at all times be conducive to the competitive execution of transactions. All open outcry transactions, including spread and combination transactions, shall be made openly and competitively in the pit designated for the trading of the particular transaction. No bid or offer shall be specified for acceptance by a particular trader. Transactions may take place only at the best price available in the open outcry market at the time the trade occurs.

      Rule 539. Prearranged, Pre-Negotiated and Noncompetitive Trades Prohibited (in part)

      A. General Prohibition

      No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction.

      FINDINGS:

      Pursuant to an offer of settlement in which Martin Venit (“Venit”) neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on November 25, 2019, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on numerous occasions between January 10, 2018, and April 24, 2018, Venit, while acting as a local in the Standard and Poor’s 500 Stock Price Index futures pit (“S&P”), prearranged and noncompetitively executed trades opposite a local. Further, Venit executed the trades opposite the local without openly bidding or offering the orders.

      Specifically, the Panel found that after Venit initiated a long or short position for S&P futures in the pit, the local executed a trade on Globex for a corresponding quantity of E-mini S&P futures contracts (“E-mini”) in the opposite direction of Venit’s S&P futures pit trade. Shortly thereafter, Venit and the local carded up a trade opposite each other in order to offset positions in both accounts. The Panel concluded that Venit thereby violated CME Rules 521 and 539.A.

      PENALTY:

      In accordance with the settlement offer and after taking Venit’s financial condition into consideration when it levied the sanction, the Panel ordered Venit to pay a $5,000 fine. The Panel also suspended Venit from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or operated by CME Group for one year. The suspension shall begin on November 27, 2019, and continue for a period of one year from the date that the ordered fine is paid in full.

      EFFECTIVE DATE:

      November 27, 2019